Tendering and
Bidding Briefing:
Give your tender a
winning chance
NB: Please note this briefing is a working document which will be updated to include
delegate feedback collected at regional seminars.
The Finance Hub
Charities Aid Foundation
St. Andrew’s House
18-20 St. Andrew Street
London
EC4A 3AY
[email protected]
www.financehub.org.uk
t (020) 7832 3016
f (020) 7832 3001
Development Trusts Association
Charities Aid Foundation
National Office
33 Corsham Street
London N1 6DR
[email protected]
www.dta.org.uk
t 0845 458 8336
f 0845 458 8337
acevo
1 New Oxford Street
London WC1A 1NU
[email protected]
www.acevo.org.uk
t 0845 345 8481
f 0845 345 8482
Funded by
Abstract
The climate has changed for third sector
organisations across the country.
Spending public money in an open and
transparent manner to achieve particular
outcomes has become a natural
requirement for commissioners, and has
led to a “contract culture” for those they
fund.
Grants are becoming less common and
contracts are becoming the norm. With
contracts comes formal procurement,
which puts additional pressure on third
sector organisations of all sizes. They
must now be able to engage
competitively in open tenders with public
sector bodies and private organisations,
as well as with each other.
This may seem a daunting prospect, but
third sector providers should be actively
tendering for services. The sector has
been innovating and adding value for
many years. As a result it has some
exceptional services to offer: the difficulty
lies in communicating this effectively to
commissioners.
3
Introduction
The Government recognises the
significant role already played by third
sector organisations in public services
and is keen for this to grow. An action
plan drawn up by the Cabinet Office in
2006 set out reforms to increase third
sector involvement in public services.
The first point is important. In the future
you may need to bid for services that you
already run.
You may wish to take on new services:
• To develop your capacity, enabling
more people to benefit from your
service,
• To move into new geographic areas,
or
• To move into working with new groups
of people.
Further policy papers have repeatedly
highlighted the desirability of a greater
third sector role. This will mean more
services will be tendered. The need for
third sector organisations to engage
effectively in competitive tendering will
only increase.
This briefing summarises the different
kinds of tender processes, and explains
how best to manage each.
You may submit a tender
• To retain the right to deliver an existing
service, or to
• To win a contract for a new service.
4
Key points
1. Find out whether and where tenders
are advertised. This is governed by
various regulations and laws, so pay
particular attention to the
commissioners you might be
interested in working with.
5. Partnership working has pros and
cons. Consider these and set up
potential partnerships well in advance
of the tendering process.
6. Follow all the rules of the process
scrupulously. Getting minor details
wrong can disqualify you. Prepare
carefully for every stage.
2. Think carefully about whether to
tender for any given piece of work. Do
not rush into bidding just because you
are afraid of missing out on
opportunities.
7. Remember that your tender
documents may form part of the
contract. There may be no further
opportunity to renegotiate what you
have submitted, so get it right first
time.
3. Give real thought to the prequalification stage of the tender
process, which provides an
opportunity to take a step back and
examine your policies.
4. Find out as much as you can about
the commissioner’s objectives and
requirements. If there’s anything you
do not understand about the tender
process, do not be afraid to ask the
commissioner directly.
5
Types of tender process
As many public service contracts are
commissioned by local authorities (or
primary care trusts), you should look at
each commissioner’s contracting policies
or standing orders. Commissioners
interpret the requirements of EU
legislation in different ways.
services. Organisations are normally
checked for competence prior to being
placed on the lists. Organisations can
normally apply to be put on the list once
each year, at the time when the
opportunity is advertised. This means
that the contract commissioner does not
need to go through an expensive
advertising process for every tender.
Open Tender
The details of an open tender are publicly
advertised. The value of the contract will
dictate where the advert must be placed:
locally, regionally, nationally or across the
European Union.
Single Tender
The commissioner may decide to ask for
a tender from a single organisation. In
these cases the value of the contract is
often very low and there is usually
supporting evidence as to why it is
appropriate to choose a particular
provider.
Approved Provider List or Register of
Contractors
In some cases, only organisations on a
particular list are invited to tender for
6
Case Study 1: Supporting People
However, the new Supporting People
‘Grant’ came with a contract for each of
their services. Many such contracts
consolidated small pots of money into a
bigger single pot. This meant a much
larger contract value per annum.
This case study shows how changes in
the design of funding programmes may
mean competitive tendering is
required.
In 2003 the Government brought in a new
programme called Supporting People,
which supports vulnerable people to
maintain their independence in
accommodation. Although many new
services emerged as part of the new
programme, many more had been around
for years and were previously funded by
various separate pots of money.
Once the initial contract came to an end,
council contract standing orders meant
that the services had to go out to
competitive tender.
Although service providers had been
running services successfully for years,
they now found they had to tender
competitively to retain those services.
For providers this was very positive in
some respects: they no longer had to
report to different funders in different
ways, or to seek funding from many
different funding pots.
7
Finding opportunities to tender
The first challenge for any organisation is
finding out when things are tendered. As
shown above, the size of the contract
affects where the tender is advertised. If
you expect a commissioner to advertise a
piece of work, you should find out where
and when they intend to advertise it.
Should you bid?
It is all too easy to jump at every tender
that comes out, for fear of missing out on
an opportunity. Before you do, consider
some of the key facts. A lot of hard work
is required to put a tender together. You
may reach the end of a long process only
to discover that you don’t want to, or
cannot, do the work anyway.
Most areas of work have a trade
magazine where many of the tenders will
be advertised. Many national newspapers
also carry tender adverts.
Ask yourself:
• Does the piece of work fall within your
aims and objectives?
• Does the piece of work fit with your
business plan and strategy?
• Do your governing documents (e.g.
your Memorandum and Articles of
Association) allow you to undertake
this work?
• Will it enhance or detract from other
areas of your work?
• Do you have, or can you develop, the
capacity and infrastructure to deliver
the service?
• What do you know about the
particular commissioner? Do you want
to provide a service for them?
• Do you have relevant experience in the
• Client group?
• Geography?
• Type of work?
• Are all the clauses in the proposed
contract acceptable to your
organisation?
• Is the time that will be spent in
submitting a tender worth it? Consider
the contract value, the overall value to
your organisation, and your likelihood
of winning the contract.
• Will TUPE (staff transfer) be involved if
you win the contract and what are the
associated risks?
Increasingly the internet is used to
advertise tenders. If you type “tender
portal” into any search engine you will
find a whole list of different sites with
information on the latest contracts to be
tendered. Many sites charge for access,
but others are free.
Two sites for large tenders are
• www.government-online.net/home.asp
• http://ted.europa.eu/Exec?DataFlow=
hRead.dfl&Template=TED/homepage&
hpt=ALL&StatLang=EN
This second link is to the English
Language Page of Tenders Electronically
Daily (TED), which lists opportunities
throughout Europe. It includes all tenders
above a specific size from local and
national governments across Europe.
Many local councils and Government
Departments advertise tenders. You will
know which departments are most
relevant to your work. Spend some time
going through their own websites to see if
their tenders are advertised.
Many of those who advertise through
their own web pages offer individuals and
organisations the opportunity to sign up
to e-mail notifications or to receive RSSfeeds, which notify you of new
information as it is put up on the website.
If you have a negative response to any of
the above questions then you should
consider very carefully whether to tender.
You may find it helpful to undertake a risk
assessment.
8
The tender process
All tender processes vary but the
following approach seems to be used
most often.
finding out more about a specific tender,
you will need to submit an expression of
interest. This does not commit you to
tendering.
1. Pre-tender qualification
When you have received a full tender
pack you should go through it and find
out exactly what is involved in the tender
process and the contract itself. Ask
yourself again whether it is appropriate to
go for this tender.
Initially there will be a pre-tender
qualification process to establish a select
list. Your organisation will need to provide
information on your processes, policies,
and relevance for the general area of
work. For example, to get placed on a
list for adult services you would need to
prove your charity had some experience
of working with vulnerable adults, or had
relevant transferable skills.
It is often worth trying to find out why a
commissioner is tendering a service and
what they are hoping to achieve. It could
be that they are tendering because they
want to generate economies of scale; or
because they are not happy with the
current provider. It may be a new service
where they want to see innovation. They
may have to tender under their own
policies and have no particular goal in
mind.
The prequalification questionnaire is your
first opportunity to present yourself to a
commissioner. It can give you a chance
to learn how the commissioner will
expect you to work. Other background
information you receive may tell you how
the commissioning organisation is
managed.
There is generally a period during which
questions can be asked regarding the
tender. Usually questions have to be
submitted in writing and answers are
shared with all those who expressed an
interest.
Undertaking a prequalification
questionnaire can be extremely positive
for an organisation: it makes you take a
step back and examine your processes.
Give yourself plenty of time to complete
the stage, as you may need to amend or
update your processes.
3. Writing the tender
Make sure you leave plenty of time for
writing and submitting the tender. There
are often unexpected problems, so allow
more time than you think you will need.
At this point think about the types of
work that may be tendered by the
commissioner and consider possible
partners for these projects. A relationship
with a potential partner takes a long time
to establish, so it should be worked on
before the tender is advertised.
Commissioners are generally obliged to
give you information on how they score
tenders, but they don’t always send this
out.
2. Tender packs and expressions of
interest
Whenever you are tendering you should
ask for the scoring mechanism that is to
be used as this way you can ensure that
you focus your answers to maximise the
points received.
Once on the select list, you will receive
information about tenders from the
commissioner. If you are interested in
9
Preparation
Before writing the tender it is worth taking
some time to go through the following
questions. Then you can work your
answers into the tender later on.
The first question is: why is the service
needed? Why should the service exist at
all? The easiest way to demonstrate this
is through an example.
Domestic Violence Refuges: the need
As an organisation you should know
why a service is needed. For instance, if
there were no domestic violence then
there would be no need for any refuges.
You should also know who it is a
problem for, for example
• The victim,
• Children of the victim,
• Other family members,
• Neighbours,
• NHS,
• Housing Department,
• Police.
• 1 in 4 women and 1 in 10 men
experience some form of domestic
violence at some time in their lives
• It takes an average of 35 attacks
before a victim will report domestic
violence to the police1
• 88% of people saying they had
experienced domestic violence in
the British Crime Survey did not see
it as a crime.
• There is significant under-reporting
of domestic violence especially
amongst some socio-economic
classes and ethnic communities.
What are the demographics? Based on
the figures, how many people in the
area concerned could reasonably be
assumed to experience domestic
violence?
This sort of information makes it real. As
third sector service providers we are
extremely good at developing services
because we have seen needs. Because
we know them so well we sometimes
1
forget to explain them. Remembering
why the service is needed in the first
place will help give your tender the
passion and drive required.
The Times, July 9th 2007
10
After that consider the following
questions:
2
What are the factors that influence this
tender?
• Why is it being tendered?
• What are the gaps in the current
service?
Why is your organisation best placed to
deliver what’s needed?
• What’s your experience of the client
group involved?
• What’s your experience of the
geographic area?
• What else have you done that’s similar?
• What’s your unique selling point (USP)?
• How many people have you helped
before?
• What is the competition like?
• Could you offer something significantly
different to what is currently being
delivered?
• Would a consortium bid with other
providers be favourable?
• What added value can you bring?
What will you actually do?
• How will you do it?
• What are the numbers of people you
will work with (could be stated in the
service specification)?
• How long will you work with them for?
• Is there a pathway/process they will go
through?
• Where will it take place?
• Will it use new approaches /
technology etc?
What are the outcomes?
• What will be the outcomes for people
in the service?
• What will be the outcome for the wider
community?
• How many people will have positive
outcomes?
• What will be the benefits for other
relevant bodies e.g. reduced crime,
lower hospital admissions?
• How many people will report that they
are happy with the service?
Who else should be involved?
• Which other organisations or
authorities would you seek to involve,
and at what stage?2
For more information on outcomes and tendering, see the Finance Hub’s Impact Briefing
11
Partnership models
Your organisation may wish to work with
other organisations, making joint bids for
work. This gives the benefit of being able
to take on much bigger areas of work.
appropriate, then you will need to
consider various issues. Think about
partnership working, legal issues, dividing
work and drafting the contractual
documentation. Costs will probably
increase, as you will need to cover the
additional costs of servicing the
partnership, including VAT implications3.
Building relationships with partners
cannot be done at the tender stage. You
need to have a good existing relationship
in place. They should be organisations
you feel comfortable working with, and
who can bring a different aspect or
element to the tender.
Assess the risks and the pros and cons
of the partnership. If you decide that a
partnership/consortium bid is appropriate
then it is worth seeking further legal
advice.
If you feel that a consortium bid may be
Tender format
Tenders and bids may differ depending
on the size of the contract, the
commissioner and the type of tender
process. There may be different forms
for you to fill in and submit with your
tender. Some commissioners will set
questions for you to answer. Others leave
it to you to decide what to say.
No Questions to Answer
If there are no set questions, consider
very carefully what to write. Look through
the tender pack. There will almost
certainly be a service specification which
says exactly what the commissioner
expects from the service. Structure your
response based on this, saying exactly
how you would deliver each aspect.
Questions to Answer
If questions are set, then make sure you
answer them all thoroughly, even if you
have to repeat yourself. Sometimes
tender documents are split up and given
to different assessors. Assessors may not
be able to take your other answers into
account, so might deduct points from
answers that seem incomplete.
The pack may also say what is expected
of the successful organisation, for
example:
• Previous experience of working with
the client group
• Knowledge of the geographic area
• Knowledge of key policies and issues
for this service type
• Experience of partnership working
• Proven track record in delivering
services on time
• Capacity within the organisation to
manage the project
• Commitment to continuous
improvement
When answering questions in a formal
tender process, always try to give details
of how you would actually do the work.
Wherever appropriate, relate this back to
previous experience to show that you
really can deliver. Use a number of
experiences: you don’t want to seem a
“one trick pony”!
3
If there is such a list, then address all its
requirements. If there isn’t a list, then
come up with your own, based on the
outline list above.
For more information on partnerships and VAT, see the
Finance Hub’s VAT Briefing:
12
Make sure the document is easy to read.
Give assessors a document that is well
laid out, in a logical format. It will be
easier for them to see how you meet the
specification and therefore allocate the
points you deserve.
Presentation
Follow the rules:
• If a format has been given, then stick
to it.
• If the tender pack gives you a word
limit, then don’t go over: people
actually do count them!
Costing a tender
It is important to note that the document
you submit is likely to become the basis
for a contract. You may not have the
option to change anything at a later date
should your organisation be successful.
Your costings, staffing levels, and details
of what you will deliver must be thought
through carefully, conservatively and with
the proper approval.
• Explain any assumptions that you
have made. That way, if the
commissioner doesn’t agree with the
assumption, they can challenge that,
rather than the price.
• It may be that you are requesting more
than it actually costs you to deliver the
service so that you can put a small
surplus into your organisation’s
reserves. This is a sensible approach,
but make sure you explain it.
Very few commissioners base their tender
evaluation on cost alone, but it is worth
finding out how much emphasis will be
put on cost.
• Remember, if your staff or office are
funded by more than one project
allocate the costings fairly across the
different funders.
There are several things to think about
when costing a tender. Appendix A gives
a list of things that you should consider.
The Commissioner is likely to specify how
you should break down your finances.
This may be very simplistic, for example:
• Be wary of using round numbers, for
example saying that the pension
contributions will be £3,000. Round
numbers suggest that you’ve guessed
rather than actually worked it out!
• Front line staff costs
• Management costs
• Overheads
Full Cost Recovery
Work through your own process of
costing the contract before completing
the Commissioner’s model. That way you
will know that you have factored in all
your costs.
This model costs each service fully,
including the relevant portion of overhead
costs. It ensures that overhead costs are
covered, and that each project or service
is costed fully.
Don’t forget the following:
You may choose to subsidise a service
initially to help you to appear more
competitive. If this is the case then you
should know why you are doing it, what it
is actually costing, and how you will
cover costs in the long-term4.
• If the tender is for more than one year,
then remember to cost in any inflation
in the costs of staff and suppliers.
4
Acevo and the Finance Hub have several other publications
on achieving full cost recovery.
13
necessary information to be able to
properly assess their liabilities and costs.
Sometimes Providers will be asked to
complete a Confidentiality Agreement
before the Procurement Department will
release such information.
TUPE
TUPE standards for Transfer of
Undertakings (Protection of Employment)
regulations 2006.
TUPE often applies when a service is
tendered and an existing provider is
replaced by a new one. It means that the
employees in the original services often
have the right to be transferred to the
new organisation. They then have all their
previous rights protected, such as hours
of work, pay, holiday and pension
entitlement.
Check whether the submission should
include TUPE costs. The tender pack
may be silent on the matter. Consider
whether the TUPE costs lead to an
uncompetitive price. Assess the likely
impact on the organisation and the time
and investment required to deal with
culture change and changes in working
practices.
Organisations tendering for services will
need to examine whether TUPE will apply
if they win a tender and consider what
this will mean in the future.
Take into account the numbers of staff
transferring. Assess the number of staff
required to deliver the contract against
the number of staff eligible for transfer,
and properly cost into the bid any
redundancy costs that result.
It is really important that providers
consider the risk of TUPE when bidding
for contracts, and receive all the
Following the tender rules
The tender process can often feel overly
bureaucratic. However, the processes are
generally put in place to ensure fairness,
as the resulting contract is often worth
significant sums of money. Follow all the
guidelines carefully.
Make sure that you:
• Return all the documents requested
• Sign all the documents that need
signing
• Do not identify the organisation on the
tender envelope
• Stick to deadlines – they are not
negotiable
• Follow any restrictions on
communicating with other
organisations (especially if trying to
undertake a consortium bid)
• Do not alter any of the official
documentation provided.
Many organisations have put significant
amounts of time into preparing a
document only to have it rejected before
it’s even been opened. If the franking
machine puts the name of your
organisation on the outside of the
envelope, this can disqualify you!
14
Case Study 2:
Check, check and check again!
information that was copied over was the
costing. This resulted in the organisation
bidding for all three pieces of work with
the same breakdown and cost. Not only
did this mean that the price breakdown
did not support what was said in the text,
but the Authority had stated upper limits
for prices.
This case study shows the importance
of checking every tender carefully.
Don’t just cut and paste!
In 2006, an organisation (who shall
remain nameless!) was tendering for
several different services advertised by a
local authority. The format was the same
for all tenders and much of the
information going into the documents
was the same.
In two of the three cases, this meant that
the price submitted by the organisation
was higher than this and therefore
instantly rejected!
Therefore some of the information was
copied and pasted between documents.
Unfortunately one of the pieces of
4: Short listing and the evaluation panel
Following the closing date for the
submission of tenders, a panel will meet
to evaluate them. They tend to use a
simple scoring mechanism.
also attend. All too often this is where
some large organisations fall down: they
send a business development team who
have no front-line delivery experience and
therefore can only give abstract
theoretical answers instead of real
examples. You could also take a member
of front-line staff and perhaps a user of
your current services.
If your organisation has been short listed,
you will be invited to attend an interview.
Full details of the interview should be
contained in a letter and if they’re not,
don’t be afraid to phone up and ask for
them.
Make sure that you prepare well for the
interview. If there is a presentation, then
practice it and time it several times. Think
through the questions that you are likely
to be asked and how you might answer
them.
The interview will, as with the tender
evaluations, be a scored process, so
ensure that you find out the scoring
system before you get to the interview.
Consider who from your organisation
should attend the interview: generally this
will be two or three people. Show that
the organisation is taking this tender
seriously, so a senior member of staff,
such as the Chief Executive, should
attend to answer questions about how
the work fits with organisation’s strategy.
All members of the team should be able
to answer relevant questions. Be very
wary of the Chief Executive answering
too many questions. This suggests a lack
of faith in the ability of the staff involved
in service delivery.
Each member should understand
• their part in the interview,
• how their role fits into the
organisation,
The person who would actually be
managing or delivering the service should
15
• what their part will be if the tender is
won.
interviewees take their time over the first
few questions to try and ensure maximum
points, only to end up running out of time
on question 7 and therefore losing all the
points they could have scored on
questions 8, 9 and 10.
Use the interview to go over some of the
key points you made in your tender
document. Remember that some may
not have seen your tender submission, so
will be scoring you on what you say that
day. Take the opportunity to stress what
you can do that’s different from others.
As with the tender submission, make sure
that you back up what you’re saying with
experience.
The points system may also be weighted,
with points from the tender evaluation
counting as 70% of the total and points
from the presentation and interview
making up the remaining 30%. A high
score in the tender document might
therefore have more impact than a high
score at the interview.
If you are told at the beginning of the
interview how long the interview will take,
make sure you tailor your answers to
questions accordingly. Many
5 The final stages
this will only cover minor elements of the
contract. If in doubt over what can be
negotiated, then ask.
Ask for feedback
Don’t forget to ask for feedback from a
tender process whether you were
successful or not. Any feedback will be
useful when it comes to tending the next
time.
It is often assumed that you can pull out
of the process if you don’t want the
resulting contract, but once you have
submitted the document this is not
always the case. If you are unsure about
whether you want to undertake the
resulting work, then it is best to resolve
the issues before you go to all the hard
work of putting the tender document
together.
Room for negotiation is limited!
Remember that the tender document will
probably form part of your contract. You
must be prepared to deliver what you
have said you will, for the price you have
stated. There may be a chance for some
negotiation at the pre-contract meeting,
once you have won the tender. However,
16
About the author
Disclaimer
The information in this article is believed to
be correct at the time of publication. It is
general in nature and is not intended to be
exhaustive nor to provide legal advice in
relation to any particular situation, and
should not be acted or relied upon without
taking specific advice.
Nichola Goom is Chief Executive of ROCC
which is an umbrella body supporting
organisations in housing, care and support.
ROCC improves the lives of people
requiring support by providing training,
information, consultancy, research and
representation to purchasers,
commissioners and providers of housing,
care and support.
Further reading
Partnership in Public Services – An action
plan for third sector involvement – Office of
the Third Sector (2006)
ROCC provides:
• Support, representation and coordination for agencies working with
vulnerable and disadvantaged people
• Expert advice and information on major
issues affecting the housing, care and
support sector
• Quality learning and personal
development services
• Cost effective consultancy and research
• Mechanisms for the facilitation of
partnership working
• Mechanisms for the direct involvement
of service users in strategic planning
and decision making at all levels of
service
Full cost recovery – a guide and toolkit on
cost allocation – acevo (2004)
Transfer of undertakings (TUPE – CIPD
(2007)
Full Cost Recovery – Finance Hub
http://www.financehub.org.uk
ROCC have been working with providers in
developing their skills in tendering for
services and to this end have develop
training aimed at improving organisations
ability to competitively tender.
17
Appendix A:
Some cost items
The form below is designed to be a
prompt for information which may be
relevant. Not all of the costs below will be
relevant to your organisation, so go
through this form and complete the
relevant elements.
£
Front-line staff salary
• Front line staff NI & Pension contributions
• Front line staff allowances
• Front line staff relief costs /locum cover
Management staff salary
• Management staff NI & pension contributions
Redundancy payments
Relocation expenses
Recruitment advertising
Staff travel costs
Essential car user allowances
Relocation expenses
Medical expenses
CRB checks
Mobile phone costs
Staff training
Subsistence costs
Actual delivery costs for the service –
ie food for animals if an animal shelter etc
Other accommodation rental
Heating & lighting
18
Photocopying & printing
Marketing
Telephone, internet & fax costs
Finance costs
Personnel costs / recruitment costs
Insurance
Utilities
Office cleaning
Refuse collection
Gardening
Rates
Security services
Rent
Redecorations
Equipment maintenance
Equipment hire
Depreciation
Room hire
Stationery
Postage
Books
Catering
IT supplies
IT maintenance
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19
St Andrew’s House
18-20 St Andrew’s Street
London EC4A 3AY
tel 020 7832 3016
[email protected]
www.financehub.org.uk